Dhanin Chearavanont is one of South-East Asia’s leading tycoons and one of the most eager to restructure. Can he untangle his business from his family?

IN ORDER to grasp just how much Dhanin Chearavanont, the patriarch of Thailand's largest corporate empire, stands out from South-East Asia's business culture, first consider how much he once personified it. The son of immigrants from southern China, he built the family business from humble beginnings to towering heights. He mastered the winks and nods of the overseas Chinese networks, then kept outside investors in the dark. He expanded recklessly into totally unrelated industries.

By 1997, Charoen Pokphand (CP), the empire that Mr Dhanin runs, was a typical Asian family business. It sprawled. CP's “core” business, if it had one, was the production of food—it is, for instance, the world's largest producer of animal feed and tiger prawns. But CP was also dabbling in telecoms, insurance, retailing, pharmaceuticals, petrochemicals, breweries and even motorcycles.

All this had to be financed, and here too CP was typical. Part of the group was privately held by the family and totally opaque; other parts were publicly listed. Investors would put their money into the listed part, but had virtually no way of tracing what happened to it thereafter. All of this was, and still is, so commonplace in much of Asia that it would hardly be noteworthy, except for what has been happening lately.

For most of Asia's tycoons, the economic crisis of 1997-98 was traumatising, but a wake-up call it was not. Mr Dhanin, by contrast, sat down with his brothers for some honest reassessment. His conclusion—which, in South-East Asia, borders on radical—was that CP should slim its activities. So Mr Dhanin started turning down “offers” to expand (into power plants, motorways and airports, for instance) and even began selling things (supermarkets, a brewery, the motorcycle maker and more). He also vowed that CP would try harder to please outside shareholders by striving to become more open.

If raising these subjects at the family—ie, boardroom—table suggests an unusually open mind, then this is not so out of character. Mr Dhanin has always blended typically Asian ways of thinking with his own idiosyncrasies. He loves cock-fighting, but insists on making the sport more humane by putting little boxing gloves on the sparring roosters, in place of the customary blades. He breeds pigeons and gets rather competitive about racing them, but he never orders pigeon in a restaurant.

In business as well as sport, Mr Dhanin ploughs his own furrow. He swears by Feng Shui, and has been known to consult face readers before hiring executives. He also displays a flexible attitude to patriotism. At home, the family speak their ancestral dialect, and there are those who claim that Mr Dhanin's Mandarin sounds better than his Chinese-accented Thai. He has certainly never tried to hide his roots: he was the first outside investor in China when Deng Xiaoping re-opened the country in 1978, and he is one of the biggest and best-connected investors there today. Yet he is also a proud Thai, adorning office walls with portraits of the royal family, and showing off the pin on his lapel, which was put there by the king himself in recognition of his good deeds. Mr Dhanin is also close to many Thai politicians, not least the current prime minister, who happens to be an ethnic Chinese telecoms tycoon.

For all his connections, Mr Dhanin, 61, is humble enough to realise that he must forever keep learning and changing. So he and his brothers, who are in their seventies, have agreed on a management motto: “Every year we get a year older, but let's make sure that our brains get a year younger.” Whether the subject is the latest food-production technology, shifts in health consciousness among consumers, or new management fads touted by globe-trotting consultants, Mr Dhanin claims to listen. It is this attitude that has helped CP win accolades as one of the best-run conglomerates in Asia.

Not quite in focus

Nonetheless, this is still Asia, so there are limits to the pace of change. Take, for instance, Mr Dhanin's two favourite words these days: “focus” and “transparency”. For hard-nosed executives in western countries, being “focused” is like being pregnant—you either are or you aren't—but Mr Dhanin seems to think that being half-focused will do. Here, family considerations play a part. Even without synergies, he says, telecoms in Thailand looks like a great opportunity, as does retailing in China. So one son runs the former, another the latter, and this won't change. The same ambivalence applies to transparency. Mr Dhanin talks more to investors and the press than he used to, and discloses more about his listed companies. But large parts of the empire remain in a cloud. Eventually, he says, all of it should come under a public holding company. When? He gives no timetable.

Still, behind the changes at CP lurks a bold vision. Mr Dhanin and his brothers were raised on Confucius, so they would never put the company above the family. At the same time, he recognises that the company has outgrown the family (it needs more outside capital) just as, in another way, the family has outgrown the company (there are too many relatives for all to be managers). In the long run, Mr Dhanin reckons, the only way to keep peace in the family is therefore to make all its members shareholders in a transparent company. Then none of them has special advantages when buying or selling shares.

To Mr Dhanin, who is a Buddhist, there is an even deeper thought here. He believes companies are like living beings: they follow a cycle of birth, growth, decay and death. “We cannot keep the business in the family forever,” he says, smiling. “So if you know that, why not prepare?”